Quick Look at Xylem (XYL)

Now trading at a price of $101.18, Xylem has moved -3.1% so far today. In contrast, the S&P 500 index moved -1.0%. Read below for a basic value analysis of Xylem.

Xylem shares moved 16.7% over the last 52 weeks, with a high of $118.58 and a low of $72.08. During this time, the stock outperformed the S&P 500 index by 25.0%. As of January 2022, the company's 50-day average price is $102.0. Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions for the water and wastewater applications in the United States, Europe, the Asia Pacific, and internationally. The large-cap Industrials company has 17,800 full time employees and is based in Washington, DC. Xylem has returned a 1.1% dividend yield over the last 12 months.

The Company Has a Steady Stream of Positive Cash Flows:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $5,249 $4,876 $5,195 $5,522
Revenue Growth n/a -7.11% 6.54% 6.29%
Gross Margins 39.0% 37.5% 38.0% 37.7%
Gross Margins Growth n/a -3.85% 1.33% -0.79%
Operating Margins 13.3% 10.2% 11.4% 11.8%
Operating Margins Growth n/a -23.31% 11.76% 3.51%
Net Margins 7.64% 5.21% 8.22% 6.43%
Net Margins Growth n/a -31.81% 57.77% -21.78%
Earnings Per Share $2.21 $1.4 $2.35 $1.96
EPS Growth n/a -36.65% 67.86% -16.6%
Diluted Shares (MM) 181 181 182 180
Free Cash Flow (MM) $613 $641 $330 $388
FCF Growth n/a 4.57% -48.52% 17.58%
Capital Expenditures (MM) -$226 -$183 -$208 -$208
Net Debt / EBITDA 1.68 1.62 1.3 1.24

Xylem Is Overvalued:

Compared to the Industrials sector's average of 20.49, Xylem has a trailing twelve month P/E ratio of 51.6 and, according to its EPS guidance of 3.63, an expected P/E ratio of 27.9. Xylem's PEG ratio is 2.09 based on its 10.42% compound average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued.

Xylem's P/B ratio is 5.2 compared to its sector average of 3.78. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 244.3% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 1.98 * 19.384) = $29.39

Xylem Is the Subject of Mixed Market Indicators:

9 analysts are following Xylem and have set target prices ranging from $105.0 to $129.0 per share. On average, they have given the company a rating of hold. At the current price of $101.18, XYL is trading -14.57% away from its average analyst target price of $118.44 per share, implying an analyst consensus of some upside potential for the stock.

The company has an above average percentage of its shares sold short since 8.5% of the company's shares are tied to short positions. Institutions own 93.1% of Xylem's shares, while the insider ownership rate stands at 0.36%. The biggest shareholder is the Vanguard Group, Inc. with a 12% stake in the company worth approximately $2,128,587,511.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.